**6.1 A simulation of crowdfunding project for an Italian Foundation**

Crowdfunding, as analyzed in literature [2, 4, 7, 19, 22], is a tool used both by individuals (including informal groups) and by organizations of various kinds, such as companies, foundations and associations.

In this section, a simulation of crowdfunding project for an Italian Onlus Foundation is carried out.

It is hypothesized that the Onlus Foundation, that deals with the management of educational and housing services for children and single or underage mothers with children, uses the crowdfunding in order to obtain resources for the realization of a project aimed at diversifying activities and at supporting adolescents in conditions of social hardship. To this purpose, the study is aimed at evaluating the opportunity for the foundation to make use of the Produzioni dal Basso platform, carrying out a simulation of the steps necessary for inserting the project on the portal, based on the needs expressed by the non-profit organization.

After identifying the key points of the project and the objectives pursued by the foundation, the simulation starts with the hypothetical registration of the foundation on the portal and the indication of the personal data relating to the representative of the institution (name, surname, e-mail address, date of birth, country of origin and residence). Therefore, it is necessary to draw up a brief description of the activity carried out by the institution: the foundation manages three activities, namely an educational community for minors, a daytime socio-educational center for minors and a housing community for pregnant women and single or underage mothers with children, and it is born with the aim of offering contexts that can help the minors grow and be formed, following individual and group paths. In this way, by inserting the guests in contexts similar to domestic-family ones, with a constant presence of educators and other professionals appropriate to the case, the foundation contributes to overcoming the inconvenience that afflicts parents and children in difficulty, and helping to pursue social objectives of essential importance for the community and for the surrounding area, considering that the foundation is linked to the activities of the competent children's court. The registration ends with acceptance of the terms and conditions and subsequent validation of the account via e-mail.

After logging on to the platform, the simulation continues with the drafting of the project in the section of the platform called: "Start collecting funds," in which it is necessary to choose the collection method among the four available. In the specific case of the foundation, the most suitable are that of the "collect all" and the "simple donation." The first allows to set up a budget, which indicates the amount of funds necessary for the realization of the project, with the addition of an incentive for those who decide to contribute. The second mode involves lower commissions (3% compared to 5% of the "collect all"), and the possibility of saving costs related to the production and shipment of the reward.

As regards the choice of the payment system, the simulation aimed to compare the different rates is provided in **Table 2**.


**233**

**Figure 1.**

*Project selection process (funnel). Source: see [23].*

*Crowdfunding: The Case of Italy*

*DOI: http://dx.doi.org/10.5772/intechopen.90940*

giving rise to a single transaction cost.

business, cultural or social idea.

inverted funnel (**Figure 1**).

Another aspect of particular importance, emerged from the simulation, concerns the availability of payments and the related cost: if the availability of funds associated with an account (e.g., PayPal) is immediate, the amounts of money are transferred to the beneficiary from time to time, financing for financing. This means that the transaction costs are multiplied by the number of supporters and this could be very disadvantageous from an economic point of view. The situation is different if it chooses to use a payment institution that allows to create an electronic wallet, in which the sums of money collected will be temporarily conveyed. Afterwards, it will be possible to make a single withdrawal, when it is wished,

When the preliminary phase is completed, the simulation continues with the drafting of the project. In this regard, the Produzioni dal Basso platform leaves complete freedom to the author, both in terms of form and content. For this reason, the borrower will be able to choose, in complete autonomy, how much and what information to enter in the text box, preferring those that can give more value to his

In order to implement a high-quality project, the simulation is based on the guidelines of the National Commission of Chartered Accountants and Accounting Experts, in order to provide the project with completeness and greater chances of success. To identify the most correct way of creating the project, it is useful to consider the prospective lender, who chooses to approach a project rather than another according to a standardized procedure, called in the technical language "funnel" that can be represented using the shape of an

The possible investor/donor approaches the project thanks to the traffic building action carried out by the platform. In this way, he obtains a generic view of all the proposals on which it is possible to invest, but in order to learn more about the individual projects, he will have to read the short presentation of each one.

**Table 2.** *Rates for the different payment systems.*

#### *Crowdfunding: The Case of Italy DOI: http://dx.doi.org/10.5772/intechopen.90940*

*Banking and Finance*

Foundation is carried out.

**6.1 A simulation of crowdfunding project for an Italian Foundation**

as companies, foundations and associations.

the needs expressed by the non-profit organization.

to the production and shipment of the reward.

the different rates is provided in **Table 2**.

Crowdfunding, as analyzed in literature [2, 4, 7, 19, 22], is a tool used both by individuals (including informal groups) and by organizations of various kinds, such

It is hypothesized that the Onlus Foundation, that deals with the management of educational and housing services for children and single or underage mothers with children, uses the crowdfunding in order to obtain resources for the realization of a project aimed at diversifying activities and at supporting adolescents in conditions of social hardship. To this purpose, the study is aimed at evaluating the opportunity for the foundation to make use of the Produzioni dal Basso platform, carrying out a simulation of the steps necessary for inserting the project on the portal, based on

After identifying the key points of the project and the objectives pursued by the foundation, the simulation starts with the hypothetical registration of the foundation on the portal and the indication of the personal data relating to the representative of the institution (name, surname, e-mail address, date of birth, country of origin and residence). Therefore, it is necessary to draw up a brief description of the activity carried out by the institution: the foundation manages three activities, namely an educational community for minors, a daytime socio-educational center for minors and a housing community for pregnant women and single or underage mothers with children, and it is born with the aim of offering contexts that can help the minors grow and be formed, following individual and group paths. In this way, by inserting the guests in contexts similar to domestic-family ones, with a constant presence of educators and other professionals appropriate to the case, the foundation contributes to overcoming the inconvenience that afflicts parents and children in difficulty, and helping to pursue social objectives of essential importance for the community and for the surrounding area, considering that the foundation is linked to the activities of the competent children's court. The registration ends with acceptance of the terms and conditions and subsequent validation of the account via e-mail.

After logging on to the platform, the simulation continues with the drafting of the project in the section of the platform called: "Start collecting funds," in which it is necessary to choose the collection method among the four available. In the specific case of the foundation, the most suitable are that of the "collect all" and the "simple donation." The first allows to set up a budget, which indicates the amount of funds necessary for the realization of the project, with the addition of an incentive for those who decide to contribute. The second mode involves lower commissions (3% compared to 5% of the "collect all"), and the possibility of saving costs related

As regards the choice of the payment system, the simulation aimed to compare

Transaction costs 1.8% + 0.35€ Bank transfer 0.6% + 0.15€

**PayPal LemonWay**

Credit card 0.8% + 0.15€

In this section, a simulation of crowdfunding project for an Italian Onlus

**232**

**Table 2.**

*Source: see [21].*

*Rates for the different payment systems.*

Another aspect of particular importance, emerged from the simulation, concerns the availability of payments and the related cost: if the availability of funds associated with an account (e.g., PayPal) is immediate, the amounts of money are transferred to the beneficiary from time to time, financing for financing. This means that the transaction costs are multiplied by the number of supporters and this could be very disadvantageous from an economic point of view. The situation is different if it chooses to use a payment institution that allows to create an electronic wallet, in which the sums of money collected will be temporarily conveyed. Afterwards, it will be possible to make a single withdrawal, when it is wished, giving rise to a single transaction cost.

When the preliminary phase is completed, the simulation continues with the drafting of the project. In this regard, the Produzioni dal Basso platform leaves complete freedom to the author, both in terms of form and content. For this reason, the borrower will be able to choose, in complete autonomy, how much and what information to enter in the text box, preferring those that can give more value to his business, cultural or social idea.

In order to implement a high-quality project, the simulation is based on the guidelines of the National Commission of Chartered Accountants and Accounting Experts, in order to provide the project with completeness and greater chances of success. To identify the most correct way of creating the project, it is useful to consider the prospective lender, who chooses to approach a project rather than another according to a standardized procedure, called in the technical language "funnel" that can be represented using the shape of an inverted funnel (**Figure 1**).

The possible investor/donor approaches the project thanks to the traffic building action carried out by the platform. In this way, he obtains a generic view of all the proposals on which it is possible to invest, but in order to learn more about the individual projects, he will have to read the short presentation of each one.

**Figure 1.** *Project selection process (funnel). Source: see [23].*

The professional lender can therefore begin to build a summary idea of the project (requested funding, timing, progress, etc.), which will be completed later with the data obtained from the social networks linked to the project, from the multimedia files, from curriculum vitae of the promoters and from the business plan. In the specific hypothesis of equity crowdfunding, everything is summarized in an informative document, which can be consulted by the user before proceeding with the financing operation [15].

The inverted funnel shape is due to the fact that, in correspondence with each step, the number of possible lenders decreases; this screening is based on the interests and objectives indicated in the project. For this reason, it is necessary to pay particular attention to every single detail entered and published on the platform. Of great impact are the photos and videos, which represent one of the main communication tools on the web; they have a high synthetic power and allow to describe the "reason why" of the project in a few minutes. The promoter of the project therefore can insert in his landing page a "pitch," namely a presentation video of 2 or 3 minutes during which the advantages related to the realization of the project are highlighted.

## **6.2 A business plan hypothesis for the project**

After general information, the simulation includes the preparation of the project business plan. In Italy, Consob has established that the business plan is mandatory only for equity-crowdfunding; however, the business plan, adapted to the collection method chosen by the foundation, can be an excellent cognitive tool for those who intend to support the project. The role of this document is in fact of fundamental importance especially because the project is sponsored at national, as well as local, level. For this reason, the supporters who are far from the territorial area in which the Onlus usually operates can use the business plan to know the scope of intervention, the strengths, the objectives achieved in the past and the reputation.

Therefore, within the business plan, the following questions must be answered: how is the foundation born? What are the objectives pursued? What activities will be carried out with the money raised? Are there any other sources of coverage for the project? Are the simulated economic-financial projections realistic and sustainable in the Long-term?

For the purposes of preparing the business plan, the self-assessment phase is of great importance. During this phase, the promoter must be able to determine the feasibility of the project and the necessary means for its realization, without resorting to optimistic visions. In addition, the business plan must contain information about the execution times and any costs that may arise later. Furthermore, three fundamental criteria must be met: consistency, since the statements must be faithful to the proposer's mission; reliability, since each data reported must to be demonstrated with appropriate documentation if requested; sustainability, that is, there must be a real connection between the budget included in the project and the expenses to be incurred. Furthermore, the language used must be simple and communicative, with the aim of retaining the investor/donor to the proposed idea.

The business plan for the project, carried out in accordance with the indications of the National Council of Chartered Accountants and Accounting Experts [23], is reported in **Box 1**.

#### **6.3 A Canvas Model hypothesis for the project analyzed**

The simulation was enriched subsequently with the preparation of a Canvas Model, that is, a useful tool to summarize immediately the information entered

**235**

**Box 1.**

into nine sections (**Figure 2**).

*Crowdfunding: The Case of Italy*

world of work.

educators.

meters of outdoor gym.

income statement is prepared.

*Draft of business plan for the foundation project.*

*DOI: http://dx.doi.org/10.5772/intechopen.90940*

all a point of reference for their personal growth.

**Who we are**: the mission of the Foundation is to face the discomfort of minors and their families, including them in a context in which they can find an environment appropriate to their age group and above

and neighboring countries. Each contribution, even of a small amount, will help to pursue the social objective of giving to less fortunate children not only a daily life comparable to that of their peers, which can increase their confidence and their resilience, but also growth prospects, education and integration into the

**The other projects carried out**: the project represents the last link in the chain of support for adolescents in difficulty. In fact, the Foundation works in the social sphere for several years, assigning its

a) a housing community for pregnant women and mothers with dependent children, with five bedrooms, a dining-living room and a kitchen. Guests are constantly supported by a coordinator and by

b) an educational community for children from 3 to 18 years old, with comfortable and colorful bedrooms and a playroom for children to play. Here, 24-hour assistance is offered, thanks to the work of a

c) a day-time socio-educational center for children from 6 to 18 years, active during the whole school period in the afternoon, in daylight hours during the summer season. The space has been designed to accommodate up to 20 minors, which are followed by a coordinator, an animator and the staff required by the Regional Regulations. Outside the building, there are also 1800 square meters of garden and 500 square

**Transparency**: the Foundation strongly believes in transparency and, for this reason, provides any type of information regarding the project and its activities. To learn more about the budget items and the state of progress of the renovation work, it can consult the gallery, the official website or the Facebook page.

**Economic and financial plan**: the Foundation owns the property necessary to start the project (investment plan) and has identified the sources of funding (sources of coverage). With regard to returns, an

organization to three important causes. In the vast structure in which it is located, there are:

coordinator and six educators with degrees in Education.

**The project**: the goal of the Foundation is to redevelop and renovate a historic building, respecting the historical-artistic characteristics (such as the peculiar ceiling frescoes). Once the works will be completed, the building will have a new and important social function, as it will be used to build two apartments for adolescent minors, in compliance with the directives of Regional Regulation no. 4 of 18 January 2007. The goal is to provide a residential service for young people between the ages of 16 and 18, who have been temporarily or permanently removed from their family due to legal proceedings or interventions by the social workers. In addition, there will be the possibility of accommodating guests up to 25 years in the hypothesis that the educational and recovery path has not yet been completed. Two independent apartments will be built, one for boys and one for girls, each consisting of double bedrooms, bathrooms, a kitchen and a common living area where the minors can spend time together doing individual or group activities. The Foundation will also take care of facilitating relations with the family of origin, favoring the reintegration of minors. Moreover, the minors will follow a path aimed at the growth and coordination of typical activities of daily life, gradually assuming responsibility and autonomy, accompanied by the presence during the day and at night, of at least one qualified educator. The project aroused the interest of the entire community, which shares and supports the social work of the Foundation, and the project was supported by the Puglia Region, which decided to allocate 200,000 euros of funding for the redevelopment works of the building. The remaining 157,000 euros, equal to 44% of the entire budget (357,000 euros), will instead be provided by the Foundation and by those who decide to contribute. Therefore, the call-to-action of the Foundation is aimed at acquiring donations outside the community

in the business plan, highlighting the strengths. The model was created in accordance with the instructions provided by its creator, the scholar Alexander Osterwalder. In fact, the model has considered the evolution of the methods of exposure of entrepreneurial projects, which have become increasingly impactful and capable of quickly transmitting the key concepts underlying the business idea. Then, the project information is summarized in a single statement, divided

Although the Canvas Model can be reworked in its form at the discretion of the author, generally two macro-areas can be identified: the left one, concerning costs, and the right one, in which the modality of value creation is described. In each

*Banking and Finance*

the financing operation [15].

the project are highlighted.

able in the Long-term?

reported in **Box 1**.

**6.2 A business plan hypothesis for the project**

The professional lender can therefore begin to build a summary idea of the project (requested funding, timing, progress, etc.), which will be completed later with the data obtained from the social networks linked to the project, from the multimedia files, from curriculum vitae of the promoters and from the business plan. In the specific hypothesis of equity crowdfunding, everything is summarized in an informative document, which can be consulted by the user before proceeding with

The inverted funnel shape is due to the fact that, in correspondence with each

After general information, the simulation includes the preparation of the project business plan. In Italy, Consob has established that the business plan is mandatory only for equity-crowdfunding; however, the business plan, adapted to the collection method chosen by the foundation, can be an excellent cognitive tool for those who intend to support the project. The role of this document is in fact of fundamental importance especially because the project is sponsored at national, as well as local, level. For this reason, the supporters who are far from the territorial area in which the Onlus usually operates can use the business plan to know the scope of interven-

Therefore, within the business plan, the following questions must be answered: how is the foundation born? What are the objectives pursued? What activities will be carried out with the money raised? Are there any other sources of coverage for the project? Are the simulated economic-financial projections realistic and sustain-

For the purposes of preparing the business plan, the self-assessment phase is of great importance. During this phase, the promoter must be able to determine the feasibility of the project and the necessary means for its realization, without resorting to optimistic visions. In addition, the business plan must contain information about the execution times and any costs that may arise later. Furthermore, three fundamental criteria must be met: consistency, since the statements must be faithful to the proposer's mission; reliability, since each data reported must to be demonstrated with appropriate documentation if requested; sustainability, that is, there must be a real connection between the budget included in the project and the expenses to be incurred. Furthermore, the language used must be simple and communicative, with the aim of retaining the investor/donor to the proposed idea. The business plan for the project, carried out in accordance with the indications of the National Council of Chartered Accountants and Accounting Experts [23], is

The simulation was enriched subsequently with the preparation of a Canvas Model, that is, a useful tool to summarize immediately the information entered

tion, the strengths, the objectives achieved in the past and the reputation.

**6.3 A Canvas Model hypothesis for the project analyzed**

step, the number of possible lenders decreases; this screening is based on the interests and objectives indicated in the project. For this reason, it is necessary to pay particular attention to every single detail entered and published on the platform. Of great impact are the photos and videos, which represent one of the main communication tools on the web; they have a high synthetic power and allow to describe the "reason why" of the project in a few minutes. The promoter of the project therefore can insert in his landing page a "pitch," namely a presentation video of 2 or 3 minutes during which the advantages related to the realization of

**234**

**Who we are**: the mission of the Foundation is to face the discomfort of minors and their families, including them in a context in which they can find an environment appropriate to their age group and above all a point of reference for their personal growth.

**The project**: the goal of the Foundation is to redevelop and renovate a historic building, respecting the historical-artistic characteristics (such as the peculiar ceiling frescoes). Once the works will be completed, the building will have a new and important social function, as it will be used to build two apartments for adolescent minors, in compliance with the directives of Regional Regulation no. 4 of 18 January 2007. The goal is to provide a residential service for young people between the ages of 16 and 18, who have been temporarily or permanently removed from their family due to legal proceedings or interventions by the social workers. In addition, there will be the possibility of accommodating guests up to 25 years in the hypothesis that the educational and recovery path has not yet been completed. Two independent apartments will be built, one for boys and one for girls, each consisting of double bedrooms, bathrooms, a kitchen and a common living area where the minors can spend time together doing individual or group activities. The Foundation will also take care of facilitating relations with the family of origin, favoring the reintegration of minors. Moreover, the minors will follow a path aimed at the growth and coordination of typical activities of daily life, gradually assuming responsibility and autonomy, accompanied by the presence during the day and at night, of at least one qualified educator. The project aroused the interest of the entire community, which shares and supports the social work of the Foundation, and the project was supported by the Puglia Region, which decided to allocate 200,000 euros of funding for the redevelopment works of the building. The remaining 157,000 euros, equal to 44% of the entire budget (357,000 euros), will instead be provided by the Foundation and by those who decide to contribute.

Therefore, the call-to-action of the Foundation is aimed at acquiring donations outside the community and neighboring countries. Each contribution, even of a small amount, will help to pursue the social objective of giving to less fortunate children not only a daily life comparable to that of their peers, which can increase their confidence and their resilience, but also growth prospects, education and integration into the world of work.

**The other projects carried out**: the project represents the last link in the chain of support for adolescents in difficulty. In fact, the Foundation works in the social sphere for several years, assigning its organization to three important causes. In the vast structure in which it is located, there are:

a) a housing community for pregnant women and mothers with dependent children, with five bedrooms, a dining-living room and a kitchen. Guests are constantly supported by a coordinator and by educators.

b) an educational community for children from 3 to 18 years old, with comfortable and colorful bedrooms and a playroom for children to play. Here, 24-hour assistance is offered, thanks to the work of a coordinator and six educators with degrees in Education.

c) a day-time socio-educational center for children from 6 to 18 years, active during the whole school period in the afternoon, in daylight hours during the summer season. The space has been designed to accommodate up to 20 minors, which are followed by a coordinator, an animator and the staff required by the Regional Regulations. Outside the building, there are also 1800 square meters of garden and 500 square meters of outdoor gym.

**Transparency**: the Foundation strongly believes in transparency and, for this reason, provides any type of information regarding the project and its activities. To learn more about the budget items and the state of progress of the renovation work, it can consult the gallery, the official website or the Facebook page.

**Economic and financial plan**: the Foundation owns the property necessary to start the project (investment plan) and has identified the sources of funding (sources of coverage). With regard to returns, an income statement is prepared.

#### **Box 1.**

*Draft of business plan for the foundation project.*

in the business plan, highlighting the strengths. The model was created in accordance with the instructions provided by its creator, the scholar Alexander Osterwalder. In fact, the model has considered the evolution of the methods of exposure of entrepreneurial projects, which have become increasingly impactful and capable of quickly transmitting the key concepts underlying the business idea. Then, the project information is summarized in a single statement, divided into nine sections (**Figure 2**).

Although the Canvas Model can be reworked in its form at the discretion of the author, generally two macro-areas can be identified: the left one, concerning costs, and the right one, in which the modality of value creation is described. In each


#### **Figure 2.**

*The canvas model. Source: see [23].*

section, few and simple words are inserted, able in first to capture the attention of the user and then to transmit emotions.

Starting from the left, the first section concerns the "Key Partnerships": any successful project must rely on collaborations and alliances with external subjects, thanks to which it is possible to reduce costs. The "Key Activities" block summarizes the most important processes in such a way as to answer the question identified by Alexander Osterwalder: "What key activities are required for the value offered?". In the area of "Key Resources," all the factors in the absence of which the project could never get underway are indicated; for this reason, it is necessary to consider the strictly essential resources, including those of a non-financial nature. The left section concludes with the "Expenditure," in which the areas of intervention that envisage higher outgoing cash flows are indicated.

In the right area of the Canvas Model, there is a very important section, namely "Offered Value". This is the true heart of the prospectus: here, the lender/ donor can discover the actual usefulness of the project. The information entered is both of a quantitative nature, expressing in terms of the volumes of the activity, and of a qualitative nature, concerning, in other words, the set of services offered.

Therefore, it is necessary to decide whether to approach through a so-called sartorial logic, building a more personal communication system, or whether to adopt the more detached and automated industrial logic. The information is entered in the "Relationship with customers" area. If in the previous section it is important to consider how the borrower intends to interact with third parties, in the "Channels" area, it is appropriate to provide all the elements useful to the user to understand how the project and the services will be brought to the knowledge of most people.

In the "Market Segment" area, the project creator will have to respond in a concise and immediate manner to the question: "What is the reference target?". Therefore, it is necessary to identify category of subjects to whom the main activity

**237**

*Crowdfunding: The Case of Italy*

200,000 euros.

requires.

campaign [23].

**6.4 Some reflections**

*DOI: http://dx.doi.org/10.5772/intechopen.90940*

costs associated with the services offered [23].

educators and auxiliary personnel.

latter case, the stay is granted up to the 25th year.

In **Figure 3**, the Canvas Model is represented.

is aimed, thus selecting a precise slice of beneficiaries. The Canvas Model closes with a reference to "Revenue," considering the number of subjects who will use the products and/or services and the value of the services offered. Through this area, the lender can make a final and decisive assessment of the cost-effectiveness of the project by comparing it with the "Expenditure" section, which summarizes the

Following the guidelines of the National Council of Chartered Accountants and Accounting Experts on the Canvas Model, the simulation led to its realization. First the section on the "Key Partnerships" was compiled: in the particular case of the Foundation, the project received financial support from the Puglia Region, which contributed 56% of the total amount of the budget, that is, for an amount equal to

The project aims at the redevelopment of the historic building and, subsequently, at its preparation in such a way as to respect the provisions of the Regional Regulations for the two apartments: without this preliminary phase, the building would not be accessible and the value could never be created. For this reason, the words

"Restructuring" and "Furnishing" have been included in the "Key Activities" section. Considering that this is a humanitarian project, in the "Key Resources" area are indicated those human resources that predominantly interface with minors, such as

With regards the "Offered Value," the foundation focuses on welcoming minors,

Also the area dedicated to the "Channels" is important so that the project can be followed in its evolution. The Foundation will mainly use its official website, the Facebook page and the YouTube channel. The Canvas Model concludes with information regarding the main project beneficiaries. In this regard, in "Market Segment" adolescents aged 16 to 18 are identified as the target of reference. Article 51 of the Regional Regulation No. 4 of 18 January 2007 provides that the apartments are intended only for adolescents in this age group, except for those who have not been able to complete their training up to the age of majority. In the

Regarding the "Expenditure" section, the main cost centers are considered, above all relating to the realization of the project (for example, furniture, energy, heating and water system). Finally, in "Revenue," the main financial revenues are included, which, considering the typology of the proponent, are due to contributions made by public administrations, donations and especially the crowdfunding

The simulation carried out shows the phases and steps necessary to start a crowdfunding activity and it allows to reflect on the advantages and criticalities of this instrument: in particular, it is useful to ask whether this instrument can replace

Although crowdfunding presents a less bureaucratic, more streamlined and innovative process, this form of finding financial resources shows in the same way some

the classic methods of finding funds or can only be used alongside them.

and then on a path that allows the guests of the structure to be able to grow and train. In the "Relationship with customers" section are inserted the two key concepts that are at the base of the project, namely "Support" and "Comprehension." The entire work of the Foundation, in fact, is aimed at guaranteeing help to all those who are welcomed inside the structure, with the right sensitivity that the situation

#### *Crowdfunding: The Case of Italy DOI: http://dx.doi.org/10.5772/intechopen.90940*

*Banking and Finance*

section, few and simple words are inserted, able in first to capture the attention of

Starting from the left, the first section concerns the "Key Partnerships": any successful project must rely on collaborations and alliances with external subjects, thanks to which it is possible to reduce costs. The "Key Activities" block summarizes the most important processes in such a way as to answer the question identified by Alexander Osterwalder: "What key activities are required for the value offered?". In the area of "Key Resources," all the factors in the absence of which the project could never get underway are indicated; for this reason, it is necessary to consider the strictly essential resources, including those of a non-financial nature. The left section concludes with the "Expenditure," in which the areas of intervention that

In the right area of the Canvas Model, there is a very important section, namely "Offered Value". This is the true heart of the prospectus: here, the lender/ donor can discover the actual usefulness of the project. The information entered is both of a quantitative nature, expressing in terms of the volumes of the activity, and of a qualitative nature, concerning, in other words, the set of services offered. Therefore, it is necessary to decide whether to approach through a so-called sartorial logic, building a more personal communication system, or whether to adopt the more detached and automated industrial logic. The information is entered in the "Relationship with customers" area. If in the previous section it is important to consider how the borrower intends to interact with third parties, in the "Channels" area, it is appropriate to provide all the elements useful to the user to understand how the project and the services will be brought to the knowledge

In the "Market Segment" area, the project creator will have to respond in a concise and immediate manner to the question: "What is the reference target?". Therefore, it is necessary to identify category of subjects to whom the main activity

the user and then to transmit emotions.

*The canvas model. Source: see [23].*

**Figure 2.**

envisage higher outgoing cash flows are indicated.

**236**

of most people.

is aimed, thus selecting a precise slice of beneficiaries. The Canvas Model closes with a reference to "Revenue," considering the number of subjects who will use the products and/or services and the value of the services offered. Through this area, the lender can make a final and decisive assessment of the cost-effectiveness of the project by comparing it with the "Expenditure" section, which summarizes the costs associated with the services offered [23].

Following the guidelines of the National Council of Chartered Accountants and Accounting Experts on the Canvas Model, the simulation led to its realization. First the section on the "Key Partnerships" was compiled: in the particular case of the Foundation, the project received financial support from the Puglia Region, which contributed 56% of the total amount of the budget, that is, for an amount equal to 200,000 euros.

The project aims at the redevelopment of the historic building and, subsequently, at its preparation in such a way as to respect the provisions of the Regional Regulations for the two apartments: without this preliminary phase, the building would not be accessible and the value could never be created. For this reason, the words "Restructuring" and "Furnishing" have been included in the "Key Activities" section.

Considering that this is a humanitarian project, in the "Key Resources" area are indicated those human resources that predominantly interface with minors, such as educators and auxiliary personnel.

With regards the "Offered Value," the foundation focuses on welcoming minors, and then on a path that allows the guests of the structure to be able to grow and train. In the "Relationship with customers" section are inserted the two key concepts that are at the base of the project, namely "Support" and "Comprehension." The entire work of the Foundation, in fact, is aimed at guaranteeing help to all those who are welcomed inside the structure, with the right sensitivity that the situation requires.

Also the area dedicated to the "Channels" is important so that the project can be followed in its evolution. The Foundation will mainly use its official website, the Facebook page and the YouTube channel. The Canvas Model concludes with information regarding the main project beneficiaries. In this regard, in "Market Segment" adolescents aged 16 to 18 are identified as the target of reference. Article 51 of the Regional Regulation No. 4 of 18 January 2007 provides that the apartments are intended only for adolescents in this age group, except for those who have not been able to complete their training up to the age of majority. In the latter case, the stay is granted up to the 25th year.

Regarding the "Expenditure" section, the main cost centers are considered, above all relating to the realization of the project (for example, furniture, energy, heating and water system). Finally, in "Revenue," the main financial revenues are included, which, considering the typology of the proponent, are due to contributions made by public administrations, donations and especially the crowdfunding campaign [23].

In **Figure 3**, the Canvas Model is represented.

#### **6.4 Some reflections**

The simulation carried out shows the phases and steps necessary to start a crowdfunding activity and it allows to reflect on the advantages and criticalities of this instrument: in particular, it is useful to ask whether this instrument can replace the classic methods of finding funds or can only be used alongside them.

Although crowdfunding presents a less bureaucratic, more streamlined and innovative process, this form of finding financial resources shows in the same way some

#### **Figure 3.**

*The Canvas Model of the project. Source: own processing on [23] and CSVPadova.org.*

critical points, first of all the uncertainty. The author of the project, in fact, at the time of publication cannot predict whether and to what extent he will find the crowd interest. In addition, it is not certain that the chosen network is willing to lend its support to the entrepreneurial, cultural or social idea in both financial and visibility terms. All these aspects, which manifest themselves in different ways depending on the chosen collection method, therefore designate crowdfunding as a supplementary and non-alternative channel, precisely because of its results that cannot be determined upstream.

In relation to the case study, if the inclusion of the project allows the Foundation to collect the funds necessary for its realization, it appears necessary, given the relevant amount to be collected, to operate with a different modality. In fact, to ensure that the structure receives the oblations useful for its sustenance, it is deemed necessary to resort to the "Recurring donation" method, thanks to which the institution will ensure for a certain period of time a flow of additional donations to those received previously or by other means.

Another relevant element for the choice of operating methods for the implementation of a crowdfunding project regards the aspect of the costs to be incurred. Beyond the possibility of creating a type of collection that does not provide for classic financial charges, in terms of interest to be paid, it is important to focus on the fees charged by operators that make it possible for financial resources to be transferred from the promoters to the lenders, as well as any costs associated with using the platform.

In a form of alternative financing to traditional channels, it is important that other types of costs do not grow in an excessive or disorderly manner, to the detriment of transparency and the social objective that this instrument pursues. In this context, the role of market supervisors, both nationally and internationally, is of crucial importance.

**239**

*Crowdfunding: The Case of Italy*

**7. Conclusions**

**Acknowledgements**

**Conflict of interest**

The authors declare no conflict of interest.

*DOI: http://dx.doi.org/10.5772/intechopen.90940*

The crowdfunding has allowed the development of new fundraising methods and the support of new projects and business initiatives. The spread of crowdfunding in Italy depends on the fact that the Italian productive fabric is mostly made up of SMEs, which are starting to look with interest at alternative forms of financing. In the European and international panorama, Italy is at the forefront of crowdfunding regulation: the legislator's goal was to encourage the exploitation of an alternative tool to encourage the financing of start-up companies, and consequently to support the economic growth and employment in Italy, where the use of tradi-

In Italy, the most common types of crowdfunding are the social lending and the equity-based crowdfunding, which are diffused thanks to the improvement of the legislation. The largest number of platforms is donation/reward, that is, campaigns

Furthermore, the chapter illustrates a simulation of crowdfunding project for an Italian Foundation. The results of this simulation provide useful insights into reflections for policy makers and for potential entrepreneurs who intend to use crowdfunding to finance their business. The study can suggest further innovative analysis to strengthen the relationship between entrepreneurs and investors.

The authors would like to thank the Italian Onlus Foudation Saverio De Bellis and its president, law. Virginia Dibello, for providing useful data and information.

tional credit is often complicated, especially for young people.

that collect funds through donations or in exchange for rewards.
